0% rip-off trick; BMI

redimp98

MBNA/BMI 0% on bal tfr for a year + 0% on purchases for 3 months. That deal is open to misinterpretation. We are aware that any purchases on top of a bal tfr are impossible to pay off as the credits go to pay off the btfr first.
However this one states 0% for months on purchases. I understood this to mean you can use the card for purchases. Anything bought within that period will not attract any interest. However that interest is only delayed. After 3 months BMI adds up what you spent, then applies its normal exhorbitant rate, and guess what..its impossible to pay off that purchase amount. Meaning...you pay interest after month 3.
If purchases + btfrs are subject to the same 0%, why is the purchase amount never able to be reduced. Rip-off.

Clariman

Hi redimp98

This is very common and is a ploy used by many, many lenders. The advice given by this site and by other card websites is that you should never make purchases on a card that as a 0% interest rate on BTs unless the lengths of the 0% intro period are exactly the same.

The reason you get charged interest is down to the way the lender allocates your monthly payments. With one or two notable exceptions, all lenders use your payments to pay off the lowest rate debt first i.e. in this case your 0% BT, so you end up paying interest on any purchases.

This will al be defined in the Ts & Cs that you signed up to when you applied for the card, which is why it is so important to read the small print.

Bad luck ... but at least you'll know next time.

Clariman

redimp98

The question remains. How can 0% on btfr be a lower rate than 0% on purchases?

YorkshireBoy

From your MBNA summary box...

How your balance is paid off

We will use your payments to reduce balances at lower rates of interest before balances at higher rates of interest. Where you have two promotional rates which are the same, we will use your payments to reduce the balance with the longer promotional period first.

...you will see that your payments go towards the 12 month BT balance first, leaving the full purchase balance to accrue interest at the typical purchases rate of 15.9% APR from month 4 onwards (and until you clear the entire balance on the card).

MarkyMarkD

redimp98 wrote: »

However that interest is only delayed. After 3 months BMI adds up what you spent, then applies its normal exhorbitant rate, and guess what..its impossible to pay off that purchase amount. Meaning...you pay interest after month 3.
If purchases + btfrs are subject to the same 0%, why is the purchase amount never able to be reduced. Rip-off.

The interest isn't "delayed". No interest is charged on the purchases for the first 3 months, just like it said. "Delayed" implies they charge you retrospectively for the 3 months - they don't.

And BMI don't charge you anything. MBNA are the card issuer, not BMI.